TIDMNMCN
RNS Number : 2954V
NMCN PLC
06 August 2020
6 August 2020
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
NMCN PLC
HALF YEAR REPORT
nmcn PLC ("the Company" or "the Group" or "nmcn"), a leading
engineering and construction company, delivering major water, built
environment and critical national infrastructure projects,
announces its unaudited interim results for the six months ended 30
June 2020.
Highlights
Six Months Six Months Period Movement
Ended Ended
30 June 2020 30 June 2019
GBP'000 GBP'000 %
Revenue 181,626 183,978 (1.3)
------------- ------------- ----------------
Profit Before Tax 809 3,463 (76.6)
Cash and Cash Equivalents 15,819 25,785 (38.7)
------------- ------------- ----------------
Earnings per Share 6.5p 27.0p (75.9)
------------- ------------- ----------------
Proposed Dividends 10.0p 9.0p 11.1
------------- ------------- ----------------
o Revenue decreased by 1.3% compared with H1 2019
o Profit before tax decreased to GBP0.8 million (H1 2019: GBP3.5 million)
o Cash of GBP15.8 million at period end; a decrease on prior year
o Current order book for completion in 2020 of circa GBP350
million (H1 2019: circa GBP356 million)
o Interim dividend of 10.0p per share (H1 2019: 9.0p)
Period Performance
o Good start to 2020, prior to the COVID-19 pandemic, and operational challenges in Q2
o Q1 revenue increased by 3.7% to GBP97.9 million and pre-tax
profit was up by 5.9% to GBP1.8 million
o During Q2, site shut-downs, productivity constraints, changes
in working methodology, and prolongation of contracts in addition
to operational completion challenges on a major infrastructure
scheme resulted in a pre-tax loss for the quarter of GBP1.0m (Q2
2019: GBP1.8 million profit)
Outlook
o All of our sites are now fully active and working at COVID-19 compliant production capacity
o Slippage on schemes starting in some of the business units,
however current order book stands at 93% of expected full year
revenues
o Blended net margins, due to COVID-19, the AMP transition and
completion of major infrastructure schemes, are anticipated to be
circa 0.5% for FY 2020
o Swift and decisive reduction in fixed costs at the outset of
lockdown has led to a revised cost base in the short term
o Indications of a new normal being established during H1 2021,
and the Group returning to margins at industry norms
John Homer - Chief Executive - commented:
"The first half of 2020 comprised two very different quarterly
trading periods. We started the year well, with the financial
results reflecting an encouraging order book and the benefit of a
number of our initiatives. In the second quarter we faced the
immediate challenges of COVID-19 with the suspension of projects
and the disruptive impact of new operating requirements and these
were compounded by some other operational issues. In overall terms,
I am delighted to be reporting a profitable result for the period
which we believe further demonstrates the value of our business
model and dedication and capabilities of our teams.
We have sought to protect the health and wellbeing of all our
stakeholders and I am deeply proud of the manner in which our
entire staff has responded to the challenges of maintaining
activity in critical areas and re-launching projects that have been
suspended. This is a strong demonstration of our people as an
overarching differentiator.
In the longer term, the attractions and opportunities of our
addressable markets remain. In the near-term, we are likely to
continue to endure the constraints of a coronavirus environment but
with a healthy order book and strong fundamental growth drivers and
opportunities within our addressable markets, we believe the
business will continue to progress."
For further information:
John Homer, Chief Executive
Daniel Taylor, Chief Financial
Officer
01623 515008
nmcn PLC
OUR OPERATING AND FINANCIAL REVIEW
Group Financial Performance
Revenue for the period is broadly similar to the comparable
period last year at GBP181.6 million against GBP184.0 million.
Profit before tax totalled GBP0.8 million compared to GBP3.5
million for the same period in 2019. The performance was impacted
by the considerable challenges faced by the Group in relation to
the operational completion of a major infrastructure scheme, the
AMP transition in its Water segment and the overall impact of the
COVID-19 pandemic.
The Group had made a good start to 2020, prior to the COVID-19
pandemic. We entered the current year with good momentum and
promising market opportunities and in the first quarter, revenue
increased by 3.7% to GBP97.9 million and pre-tax profit was up by
5.9% to GBP1.8 million. The Built Environment segment generated
profits of GBP0.2 million (Q1 2019: GBP0.2 million); the main
driver being the ongoing improving performance of the Telecoms
business unit into 2020. The Water business also continued to
perform strongly despite a reduction in revenue for many of the
segment's customers due to the AMP transition year, as well as
operational challenges on completion of the major infrastructure
schemes. The Water segment's Q1 revenues were down by 4.7% to
GBP66.9 million (Q1 2019: GBP70.2 million), but despite this,
profitability increased to GBP1.6 million (Q1 2019: GBP1.5
million).
Over the balance of the first half, however, we had to adjust to
the rapidly evolving challenges of COVID-19 and our response sought
to balance self-help with Government initiatives in a holistic and
fair manner. The second quarter saw site shut downs, productivity
restrictions, changes in working methodology, and the prolongation
of contracts, as a result of the pandemic, in addition to
operational completion challenges on a major infrastructure scheme.
This resulted in turnover reducing by 14.6% from GBP97.9 million to
GBP83.7 million quarter-on-quarter with a loss for the quarter of
GBP1.0 million.
In response to the COVID-19 situation we have taken all
appropriate steps to protect the health and wellbeing of our staff,
customers, and suppliers and to comply fully with Government
requirements and guidance as our highest priority. We remain
positively engaged with Business in the Community (BITC),
progressing charitable work with those in need. The positioning of
the business to emerge from this period in the strongest possible
condition, has been guided by our Positive Impactive Plan (our ESG
policies) and we have continued to remain a responsible member of
the communities in which we operate.
The current order book stands at 93% of expected revenues for
the year with all business units now fully operational and we have
recommenced site activities, working at COVID-19 compliant
production capacity. The impact of this on our margins has been
significant, and will continue to be so for the remainder of this
year, due to several factors, including; margin deterioration from
demobilisation of resources and remobilisation delays, reduction in
operational productivity due to revised operating procedures,
prolongation of current schemes, and the additional direct costs
associated with COVID-19.
The Board anticipates that margins for the full year 2020, due
to COVID-19, the AMP transition, and completion of major
infrastructure schemes will be circa 0.5%. In the medium-term, it
anticipates returning to a sustainable growth rate with the focus
being back on quality of earnings and margin enhancements.
Built Environment Segment
Six Months Six Months Period Movement
Ended 30 June Ended 30 June
2020 2019
GBP'000 GBP'000 %
Revenue 61,784 51,874 19.1
Operating (loss)/profit (5) 588 (100.9)
Operating profit
margin 0.0% 1.1%
Secured workload 142,000 118,000 20.3
The Built Environment segment has seen a significant growth in
revenue in the period from GBP51.9 million in the prior year to
GBP61.8 million, an increase of 19.1%. This growth is in line with
our strategy to create a better balance between the two segments.
This revenue growth in the segment was despite the challenges of
the COVID-19 but they did adversely impact on profitability
resulting in a small operating loss in the first half of the
year.
The Telecoms business unit continued to perform well in the
first half of 2020. The business unit has achieved an operating
profit of GBP0.7 million, up by GBP0.2 million on the same period
in the prior year. Further growth is expected in super-fast
broadband over the next few years, and the business unit is well
placed to take advantage of the right opportunities. During this
year the business unit has secured the Virgin Media Morpheus
frameworks in two operating regions and further works for British
Telecom.
The newly established Power & Industrial business unit has
seen delays to the start of projects resulting in insufficient
returns to cover its fixed overhead, however with the orders
received in the first half of the year we are anticipating this
reversing with a small contribution being achieved for the full
year.
Across the Highways and Building business units, the impact of
the severe weather during the first quarter along with the initial
impact of COVID-19 in March, particularly on the Building business
unit, has meant a negative contribution for the first half of the
year. The Building business unit has a solid order book in its
targeted markets as well as a number of large potential schemes in
the pipeline, where we are working on early design stages with
customers and where orders are anticipated in the second half of
the year for 2021 and beyond.
The Highways business unit had a disappointing first half year,
largely due to operational issues. However, prospects for the
remainder of the year are more encouraging. Work is due to commence
on the junction improvements to the M621, a contract of circa GBP28
million, later in the year as part of the Regional Development
Partnership by Highways England. In addition, it has secured
preferred bidder status on a number of local authority road
improvements schemes to commence later this year and add to the
opening order book for 2021.
All of the self-funded residential developments, within nmcn
Investments, are due for completion this year. Sales expectations
for this year are modest with the anticipation that most sales will
be achieved in early 2021. The current investment in these schemes
amounts to GBP17.8 million (H1 2019: GBP14.1 million) and no
further projects will be progressed until the Board is confident of
the returns from the current schemes under construction.
The secured order book for the Built Environment segment to
construct in 2020 is GBP142 million (H1 2019: GBP118 million), an
increase from the comparable period of 20.3%.
Water Segment
Six Months Six Months Period Movement
Ended 30 June Ended 30 June
2020 2019
GBP'000 GBP'000 %
Revenue 119,842 132,104 (9.3)
Operating profit 1,067 2,953 (63.9)
Operating profit
margin 0.89% 2.2%
Secured workload 208,000 238,000 (12.6)
As anticipated, the AMP transition year has resulted in a
reduction in revenue for the Water segment in the period from
GBP132.1 million to GBP119.8 million, a decrease of 9.3%. Operating
margins were impacted by operational challenges on the completion
of a major infrastructure scheme, and to a lesser extent the AMP
transition period, and the effect of the COVID-19 pandemic. These
resulted in the Water segment producing a reduced operating profit
of GBP1.1 million, down from GBP3.0 million in the previous
year.
During the period, and as previously reported, the Water segment
has been successful in securing the following strategic frameworks;
Anglian Water (Chemical Dosing), the Coal Authority and a number of
frameworks in asset security works for public sector bodies.
The secured order book of circa GBP208 million for the Water
segment at the half year stage is a significant but expected
decrease of 12.6% on the previous period (H1 2019: GBP238 million),
in line with our strategy to achieve a balance of revenue between
the operating segments. The Board continues to be cautious around
any potential delays in workload through the AMP transition which
may impact the remainder of the period, along with the ongoing
operational impact of the COVID-19 pandemic as previously
highlighted.
Continued focus on FALM (Full Asset Lifecycle Management) is
proving to be successful with investment into the digital
transformation of our products and services. This has resulted in
further orders for our products and technical services offering. We
also achieved external recognition of our success by being awarded
as Water Industry Contractor of the Year at the Water Industry
Awards for the third year running.
Legacy
In relation to the one remaining legacy contract with Cyden
Homes Limited, the Group is pursuing claims with the client for
sums greater than the carrying value and will continue to do so
until the situation is resolved. This long running dispute
continues to be progressed through the court system.
Cash
The Group's cash position at 30 June 2020 was GBP15.8 million
(30 June 2019: GBP25.8 million). As outlined in the 2019 full year
results and the recent trading update, there has been a reduction
in cash levels from the previous year due to a combination of
revenue growth (increasing working capital requirements), the mix
of contracts and customer payment terms and further expenditure on
nmcn Investments, which will run until the end of 2020. Cash
management remains a key focus, and we continued to utilise the
Group's debt facilities throughout much of the period. The Board is
pleased that cash preservation measures during the lockdown period
were effective, and these will continue to be utilised and
developed further throughout the year. The Company is currently
seeking to secure a committed revolving credit facility.
Dividends
In light of some increasing visibility on the impact of the
COVID-19 pandemic and noting the critical nature of the Group's
addressable market, and the positive expected outturn for 2020, the
Board has declared an interim dividend of 10.0p per share (H1 2019:
9.0p). This is attributable to not having proposed a final dividend
for FY 2019 as part of the cash preservation measures at the start
of the COVID-19 pandemic.
The dividend will be paid on 11 September 2020 to shareholders
on the register at 14 August 2020.
Outlook
The current order book for completion in the full year 2020 is
circa GBP350 million (2019: circa GBP356 million). This gives the
Board confidence that its expectations will be achieved, with net
margins due to COVID-19, the AMP transition and operational
challenges on major infrastructure schemes expected at circa 0.5%.
The Group's strong reputation for operational delivery, its balance
sheet, cash management and positive brand mean it is well placed to
manage further headwind challenges.
Longer term, our chosen markets remain attractive propositions,
in particular Water, Roads and Telecommunications, as priority
targets for Government investment due to urgent national needs.
In Water, the value of the latest five-year Asset Management
Programme, AMP7, agreed between the regulator, OFWAT, and the water
companies is valued at GBP51 billion. This reflects a 16% increase
in real terms over the AMP6 investment period which ended in March
2020. A major aim of the AMP programmes is to reduce leakage,
amounting to an estimated 20% of supply, and increase security of
supply.
Road building and improvements were key pledges in the most
recent Conservative Party manifesto. In the March 2020 Budget, the
Government committed to spend GBP27.4 billion on the strategic road
network in England and annual expenditure is expected to grow
steadily, peaking in 2023-4.
Last year's Conservative manifesto also pledged GBP5 billion in
funding to roll out the broadband network and improve mobile phone
coverage across the country by 2025. The growing strength of our
Telecoms business unit positions us favourably.
Housing is also a priority for the Government, which reopened
the residential market in mid-May and introduced a Stamp Duty
holiday in the Budget, whilst institutional investor demand for
both student housing and build-to-rent (BTR) continues to be
strong, albeit with some shorter-term constraints.
Given its operational focus the Group is well placed to be
involved in the delivery of such public expenditure pledges as well
as the additional opportunities that prevail due to the
well-publicised circumstances of the UK construction sector.
UNAUDITED CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
The unaudited condensed Group results for the half year ended 30
June 2020 are shown below together with the unaudited Group results
for the half year ended 30 June 2019 and the audited Group results
for the year ended 31 December 2019.
Six Months Ended 30 June Year Ended
31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Revenue 181,626 183,978 404,658
Other operating income 526 610 1,190
------------- ------------ ------------
182,152 184,588 405,848
Share of profit of joint ventures 4 - -
Raw materials and consumables (27,794) (28,848) (71,821)
Other external charges (103,524) (104,176) (229,277)
Employee costs (42,457) (41,946) (84,867)
Amortisation of intangible
assets (45) - (43)
Depreciation of property,
plant and equipment (2,899) (2,611) (5,475)
Other operating charges (4,375) (3,466) (6,695)
------------- ------------ ------------
Operating profit 1,062 3,541 7,670
------------- ------------ ------------
Finance income - 37 49
Finance costs (253) (115) (278)
------------- ------------ ------------
Profit before tax 809 3,463 7,441
Tax (Note 7) (132) (705) (1,529)
------------- ------------ ------------
Profit for the period 677 2,758 5,912
Other comprehensive income - - -
------------- ------------ ------------
Total comprehensive income
for the period 677 2,758 5,912
============= ============ ============
Attributed to: -
Equity holders of the parent 677 2,758 5,912
------------- ------------ ------------
677 2,758 5,912
============= ============ ============
Basic earnings per share (Note
6) 6.5p 27.0p 57.4p
Diluted earnings per share
(Note 6) 6.3p 26.3p 55.9p
Dividend per share (Note 8) 10.0p 9.0p 9.0p
UNAUDITED CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Treasury Share-Based Capital
Share Merger Share Payment Redemption Retained
Capital Reserve Reserve Reserve Reserve Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January
2019 1,015 455 - 1,450 20 15,229 18,169
Profit and total comprehensive
income for the period - - - - - 2,758 2,758
Shares issued on exercise
of share options 29 - - 948 - (977) -
Tax settlement of share
options - - - (1,644) - - (1,644)
Treasury shares repurchased - - (164) - - - (164)
Share-based payment
expense - - - 521 - - 521
Share-based payment
expense - deferred
tax - - - (236) - - (236)
Dividends paid - - - - - (1,214) (1,214)
-------- -------- --------- ------------ ------------ --------- --------
Balance at 30 June
2019 1,044 455 (164) 1,039 20 15,796 18,190
Profit and total comprehensive
income for the period - - - - - 3,154 3,154
Treasury shares repurchased - - (56) - - - (56)
Share-based payment
expense - - - 345 - - 345
Share-based payment
expense - current tax - - - 282 - - 282
Share-based payment
expense - deferred
tax - - - (32) - - (32)
Dividends paid - - - - - (937) (937)
-------- -------- --------- ------------ ------------ --------- --------
Balance at 31 December
2019 1,044 455 (220) 1,634 20 18,013 20,946
Profit and total comprehensive
income for the period - - - - - 677 677
Share-based payment
expense - - - (502) - - (502)
Share-based payment
expense - deferred
tax - - - (79) - - (79)
Balance at 30 June
2020 1,044 455 (220) 1,053 20 18,690 21,042
======== ======== ========= ============ ============ ========= ========
UNAUDITED CONDENSED GROUP BALANCE SHEETS
The unaudited condensed Group balance sheets as at 30 June 2020
and 30 June 2019 (restated) are shown below together with the
audited Group balance sheet as at 31 December 2019.
30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Restated
Assets (1)
Non-current assets
Intangible assets 2,227 - 2,272
Property, plant and equipment 30,265 25,710 28,775
Deferred tax asset 414 739 625
32,906 26,449 31,672
-------- --------- ------------
Current assets
Inventories 1,861 1,855 1,805
Trade and other receivables 75,354 66,929 81,201
Current income tax receivable 349 - -
Cash and cash equivalents 15,819 25,785 25,814
-------- --------- ------------
93,383 94,569 108,820
-------- --------- ------------
Total assets 126,289 121,018 140,492
======== ========= ============
Equity and liabilities
Capital and reserves attributable
to equity holders of the
Parent
Share capital 1,044 1,044 1,044
Merger reserve 455 455 455
Treasury share reserve (220) (164) (220)
Share-based payment reserve 1,053 1,039 1,634
Capital redemption reserve 20 20 20
Retained earnings 18,690 15,796 18,013
-------- --------- ------------
Total equity 21,042 18,190 20,946
======== ========= ============
Liabilities
Non-current liabilities
Trade and other payables 7,548 3,218 6,709
Obligations under leases 3,396 2,901 3,677
Provisions 303 338 313
11,247 6,457 10,699
-------- --------- ------------
Current liabilities
Trade and other payables 92,764 94,575 107,653
Current income tax payable - 810 22
Obligations under leases 1,236 986 1,172
94,000 96,371 108,847
-------- --------- ------------
Total liabilities 105,247 102,828 119,546
-------- --------- ------------
Total equity and liabilities 126,289 121,018 140,492
======== ========= ============
(1) After restatement as described in note 3.
UNAUDITED CONDENSED GROUP STATEMENTS OF CASH FLOWS
The unaudited condensed Group statements of cash flows for the
periods ended 30 June 2020 and 30 June 2019 (restated) are shown
below together with the audited Group statement of cash flows for
the year ended 31 December 2019.
Six Months Ended 30
June Year Ended
31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Restated
(1)
Cash flows from operating activities
Operating profit 1,062 3,541 7,670
Adjustments for:
Amortisation of intangible assets 45 - 43
Depreciation of property, plant
and equipment 2,899 2,611 5,475
Gain on disposal of property,
plant and equipment (214) (203) (410)
Share-based payment (credit)/expense (502) 521 866
---------- ---------- ------------
Operating cash flows before movements
in working capital 3,290 6,470 13,644
(Increase)/decrease in inventories (56) (64) 59
Decrease/(increase) in receivables 7,139 (1,747) (11,392)
Increase in amounts owed by joint
ventures (1,292) (4,368) (5,830)
Decrease in reinstatement provision (10) (11) (37)
(Decrease)/increase in payables (14,614) (3,370) 4,285
---------- ---------- ------------
Cash (used in)/generated from
operations (5,543) (3,090) 729
Income tax paid (293) (129) (1,133)
---------- ---------- ------------
Net cash (used in)/generated from
operations (5,836) (3,219) (404)
Cash flows from investing activities
Purchase of property, plant and
equipment (2,454) (1,438) (3,072)
Proceeds on disposal of property,
plant and equipment 437 532 1,062
Cash acquired through purchase of
subsidiary - - 842
Interest received - 37 49
---------- ---------- ------------
Net cash used in investing activities (2,017) (869) (1,119)
Cash flows from financing activities
Equity dividends paid - (1,214) (2,151)
Treasury shares repurchased - (164) (220)
Proceeds from exercise of share
options - 29 29
Repayments of obligations under
leases (794) (495) (1,272)
Repayments of obligations under
financing arrangements (1,164) (1,521) (3,583)
Proceeds from financing arrangements - - 1,459
Interest payable under leases (91) (58) (132)
Interest payable under financing
arrangements (32) (57) (139)
Interest paid (61) - (7)
---------- ---------- ------------
Net cash used in financing activities (2,142) (3,480) (6,016)
Net (decrease)/increase in cash
and cash equivalents (9,995) (7,568) (7,539)
Cash and cash equivalents at start
of period 25,814 33,353 33,353
---------- ---------- ------------
Cash and cash equivalents at end
of period 15,819 25,785 25,814
========== ========== ============
(1) After restatement as described in note 3.
1. Basis of preparation
The unaudited condensed Group half-yearly financial statements
have been prepared in accordance with International Accounting
Standard (IAS) 34, Interim Financial Reporting, and have been
prepared on the basis of International Financial Reporting Standards
(IFRSs) as adopted by the European Union. They do not include
all of the information required for full annual financial statements.
These condensed consolidated half-yearly financial statements
have not been subject to audit or review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 by the Company's
auditor, do not comprise statutory accounts within the meaning
of Section 435 of the Companies Act 2006, and should be read in
conjunction with the Annual Report 2019. The comparative figures
for the year ended 31 December 2019 are not the Group's statutory
accounts for that financial year. Those accounts have been reported
upon by the Group's auditor and delivered to the Registrar of
Companies. The report of the auditor was unqualified, did not
include a reference to any matters to which the auditor drew attention
by way of emphasis without qualifying their report and did not
contain statements under Section 435 and 498 (2) or (3) respectively
of the Companies Act 2006.
The Board regularly reviews financial statements, cash balances
and forecasts and the Directors confirm that they consider the
Group has adequate resources to continue to operate for the foreseeable
future. Accordingly, they continue to adopt the going concern
basis in preparing the unaudited condensed Group half yearly financial
statements.
2. Use of judgements and estimates
The preparation of unaudited condensed Group half-yearly financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies
and the reported amounts of assets and liabilities, income and
expense. Actual results may differ from these estimates.
In preparing these unaudited condensed Group half-yearly financial
statements, the significant judgements made by management in applying
the Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated
financial statements as at and for the year ended 31 December
2019.
The Group's financial risk management objectives and policies
are consistent with those disclosed in the consolidated financial
statements as at and for the year ended 31 December 2019.
3. Changes in significant accounting policies and other restatements
The accounting policies adopted in the preparation of the unaudited
condensed Group half-yearly financial statements to 30 June 2020
are consistent with the policies applied by the Group in its consolidated
financial statements as at, and for the year ended 31 December
2019.
The Group has considered amendments to existing standards and
interpretations that are effective for the year ending 31 December
2019 and is of the view that they have no impact on the unaudited
condensed Group half-yearly accounts.
Subsequent to the release of its half-yearly financial statements
to 30 June 2019, the Group has reclassified its hire purchase
arrangements as financing arrangements within the scope of IFRS
9 Financial Instruments. These arrangements had previously been
classified as leases within the scope of IFRS 16 Leases. This
reclassification has resulted in a reduction to the previously
reported obligations under leases balance as at 30 June 2019 of
GBP6,349,000, with a corresponding increase in the current and
non-current trade and other payables balances. There was no impact
on reported profit for the period ended 30 June 2019 as a result
of the reclassification.
The Group's hire purchase arrangements were classified as financing
arrangements in the consolidated financial statements as at and
for the year ended 31 December 2019.
4. Segment reporting
The Board reviews the Group's operational performance via two
segments: The Water segment and the Built Environment segment.
Segment revenue and profit
Six Months Ended 30 June 2020
Built Environment Water Total
GBP'000 GBP'000 GBP'000
Revenue 61,784 119,842 181,626
================== ======== =========
Result before corporate
expenses 4,348 9,372 13,720
Corporate expenses (4,353) (8,305) (12,658)
Operating profit (5) 1,067 1,062
================== ========
Finance income -
Finance costs (253)
---------
Profit before tax 809
Tax (132)
---------
Total comprehensive income for the period 677
=========
Six Months Ended 30 June 2019
Built Environment Water Total
GBP'000 GBP'000 GBP'000
Revenue 51,874 132,104 183,978
================== ======== =========
Result before corporate
expenses 4,197 9,669 13,866
Corporate expenses (3,609) (6,716) (10,325)
Operating profit 588 2,953 3,541
================== ========
Finance income 37
Finance costs (115)
---------
Profit before tax 3,463
Tax (705)
---------
Total comprehensive income for the period 2,758
=========
Segment assets
30 June
2020 2019
GBP'000 GBP'000
Built Environment 62,600 59,725
Water 63,628 61,293
Total segment assets and consolidated total
assets 126,228 121,018
==================== ====================
For the purpose of monitoring segment performance and allocating
resources between segments, the Group's Chief Executive monitors
the tangible and financial assets attributable to each segment.
Assets used jointly by reportable segments are allocated on
the basis of the revenues earned by individual reportable segments.
Other segment information
Depreciation and Additions to
Amortisation Non-Current Assets
30 June 30 June
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
Built
Environment 993 915 1,595 2,123
Water 1,951 1,696 3,007 3,932
2,944 2,611 4,602 6,055
==================== ==================== ==================== ====================
There were no impairment losses recognised in respect of property,
plant and equipment.
All of the above relates to continuing operations and arose
in the United Kingdom.
5. Revenue from contracts with customers
The following table shows the Group's revenue from contracts
with customers, disaggregated into major classes of revenue
and reconciled to the amount of revenue reported for the Group's
reportable segments (Note 4).
From 1 January 2020 the Group restructured the Water segment
to combine the nmcn Sustainable Solutions and NMCNomenca business
units. All revenue for the Water segment is therefore categorised
as Civil Engineering and MEICA.
Six Months Ended 30 June 2020
Built Environment Water Total
GBP'000 GBP'000 GBP'000
Building 20,347 - 20,347
Highways 18,586 - 18,586
Telecommunications 22,564 - 22,564
Power & Industrial 287 - 287
Civil Engineering and
MEICA - 119,842 119,842
61,784 119,842 181,626
==================== ========= ========
Six Months Ended 30 June 2019
Built Environment Water Total
GBP'000 GBP'000 GBP'000
Building 17,620 - 17,620
Highways 15,750 - 15,750
Telecommunications 18,504 - 18,504
nmcn Sustainable Solutions - 36,008 36,008
NMCNomenca - 96,096 96,096
51,874 132,104 183,978
==================== ========= ========
Revenues of approximately GBP75,903,000 (2019: GBP92,010,000)
within the Water segment were derived from a single external
customer.
6. Earnings per share
Basic earnings per share and diluted earnings per share are
calculated on the profit attributable to equity holders of the
parent of GBP677,000 (2019: GBP2,758,000). The weighted average
of 10,396,108 (2019: 10,211,825) shares in issue during the
period is used for the basic earnings per share calculation.
Outstanding share awards granted under the Performance Share
Plan ("PSP") totalling 714,182 awards (2019: 702,255) are considered
to be contingently issuable shares that could potentially dilute
basic earnings per share in the future, of which the performance-related
vesting conditions had been satisfied in respect of 269,486
awards as at 30 June 2020 (2019: 264,986). This additional number
of shares is therefore included in the diluted earnings per
share calculation as at that date.
7. Taxation
In respect of the six months ended 30 June 2020, the corporation
tax effective rate was 16% (2019: 20%). A corporation tax provision
has been included in relation to the taxable profits of the
Company.
8. Dividends
Amounts recognised as distributions to equity holders in the
half year:
Six Months
to 30 June
2020 2019
GBP'000 GBP'000
Final dividend for the year ended 31 December
2019
of nil (2018: 12.0p) per share - 1,214
====================== =====================
The Directors propose a dividend of 10.0p (2019: 9.0p) per share.
The total dividend of GBP1,040,000 (2019: GBP939,000), which
will be paid on 11 September 2020 to the shareholders on the
register at 14 August 2020.
9. Related parties
The Group's related parties are key management personnel who are
the executive directors, non-executive directors and business
unit leaders.
The Company has a controlling shareholder for the purposes of
the Listing Rules, being the Moyle family and its associates.
The relevant agreements as required by LR 9.2.2AR(2)(a) have been
put in place between the Company, Mr R Moyle and the Moyle family
trusts.
10. Contingent liabilities
Aviva Insurance Limited and HCC International Insurance Co. Ltd
have given Performance Bonds to a value of GBP13,859,000 (2019:
GBP8,264,000) on the Group's behalf. These bonds have been made
with recourse to the Group.
11. Share capital
The Group has previously purchased 42,500 of its ordinary shares,
which are held as treasury shares. Shares held in treasury may
subsequently be cancelled, sold for cash or used to satisfy options
exercised under any of the Company's share schemes. Whilst held
in treasury, the shares are not entitled to receive any dividend
or dividend equivalent (apart from any issue of bonus shares)
and have no voting rights.
The total number of ordinary shares in issue and total number
of voting rights in the Company, excluding shares held as treasury
shares, was 10,396,108 as at 30 June 2020 (2019: 10,406,108).
12. Seasonality
The Group's activities are not subject to significant seasonal
variations.
13. Principal risks and uncertainties
The Board consider the principal risks and uncertainties relating
to the Group for the next six months to be the same as detailed
in the last Annual Report and Accounts to 31 December 2019.
14. Responsibility Statement of the Directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
-- the condensed set of financial statements, which has been
prepared in accordance with IAS 34 and the ASB's 2007 statement
of Half Year Reports, gives a true and fair view of the assets,
liabilities, financial position and profit or loss of the
Group;
-- the interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules,
being an indication of important events that have occurred
during the first six months of the financial year and
their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties
for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules,
being related party transactions that have taken place
in the first six months of the current financial year
and that have materially affected the financial position
or performance of the entity during that period; and
any changes in the related party transactions described
in the last annual report that could do so.
J Homer, Chief Executive
Daniel Taylor, Chief Financial
Officer
6 August 2020
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FFFSFTVIEIII
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